Yes, the two-party system does invite (and require) great compromise. Having democrats and republicans as the two party system here in America, I can say that there is definitely a lot of compromise required. The views are opposite each other and nothing would get done (and sometimes nothing does get done) without compromise.
A two-party system may be broken in the United States, but at least both sides must come to a compromise for anything to get done. Yes, there are dangers of a deadlocked government that gets nothing done. However, a two-party system seems to work for the United States as it has for more than 100 years when the country became red state/blue state.